“If you are thinking of investing in residential property, it’s probably a good idea to do it now rather than later,” says Bester. “The rental market is currently booming, as a result of diminishing affordability for mortgage payments, especially in the lower income brackets, and because of the glut of stock on the market and the desperation of some homeowners to sell, there are bargains to be found.”

The biggest demand for rental properties is in the lower-income areas where people simply cannot afford to buy their own homes. Yields in these markets are generally good too, at around 10% for properties under R500 000.

Buy to let is an excellent way of building a property portfolio, says Bester. The rental market is expected to go from strength to strength, and stats for the past three years are an indication that the market is on the up and up. Figures for rental prices recently released showed rents having risen year on year by 6,43% between mid 2005 and 2006, by 6,88% over the next twelve month period and by 8,26% between 2006 and 2007.

“This indicates a growth in monthly rental prices of 30% on average in the past three years,” says Bester. “This means the long term outlook is very good, particularly when one takes account of the tax benefits available.”

Marsha Haupt, sales director of mortgage originator Betterbond, agrees.

“The current gap between rental and bond repayment rates in metro areas is approximately 65% of bond repayments,” said Haupt.

“Therefore on a bond of R500 000, the repayment would be R6 585 whereas rental would be around R4 300”.